Buying and Selling Art: Auction or Private Sale?
For many collectors, the excitement of the auction room remains one of art’s great spectacles. The raised paddle, the charged atmosphere, the thrill of competition. Yet when the invoices arrive, the economics often tell a different story. The 2025 UBS Art Market Report notes that although auctions still dominate headlines, a growing proportion of serious transactions now take place privately where discretion and cost efficiency prevail.
At auction, both sides pay dearly for the privilege of retail as theatre but before the process starts it’s the consignment specialists job to ensure that the vendor has set the bar for acquisition temptingly low. If and when the property does sell, vendors typically surrender 10-15 per cent of the hammer price in commission, often alongside charges for photography, insurance, and cataloguing. Buyers, meanwhile, pay a premium that now exceeds 25 per cent. The result is that a single work of art sold at auction generates fees approaching 40 per cent of its value paid by two different clients to the same intermediary.
To illustrate: imagine a collector sells a drawing at auction that fetches £100,000 hammer price. The seller receives £85,000 after the 15 per cent vendors commission, while the buyer actually pays £125,000 once the 25 per cent buyers premium is added. The auction house therefore earns £40,000 from that single transaction.
Two years later, the new owner decides to sell the same work, again through auction. If it achieves the same £100,000 hammer price, the cycle repeats: the seller now receives £87,500 after a negotiated 12.5 per cent fee, and the new buyer again pays £125,000 with premium. Across these two sales, the auction house has taken £77,500 in commissions while the two collectors together have paid that amount in costs, even though the artwork’s price hasn’t changed. If that wasn’t enough let’s not forget the VAT on premiums chargeable. If this was a London sale it would be 20%. The total then with all costs is very close to the £100,000 value of the work. With Sotheby’s and Christies having recently increased their buyers premiums to 27 percent that number is heading even higher.
Private sales tell a very different story but first we should define Private Sales. In essence the only parties privy to the details of the work of art, the ownership and the price are the buyer and the seller and the one individual brokering the sale. Immediate provenance does not have to be revealed though of course it’s encumber on the broker to make all checks regarding authenticity and to be able to assure the buyer that ownership is legitimate and provable.
Many auction houses now offer a private sale service. It’s a relatively new departure and the theory is you get the clout of a mainstream house without the exposure and possible downside of the unsold lot. Commissions are negotiated rather than fixed, pricing can reflect genuine market conditions, and transactions occur quietly, with confidentiality and flexibility. So that’s one option. Bear in mind they have a very high bar to entry in terms of value and are unlikely to contemplate anything sub £100,000. The truly private sale is via the one to one relationship you have with an art dealer. They have real flexibility with no heads of departments breathing down their necks. They may charge you absolutely nothing to conduct a sale depending on the complexion of the deal and whether they can garner a commission from the buyer. In any event the whole cost of sale is stripped back and leaner. In most eventualities it is a conversation that can be had a nd a scenario that can be tested with no detriment to the work of art. Suffice to say, the illustration above would have a had a remarkably different outcome. A third scenario is that your art dealer will decide to work with the private sale department of an auction house.
Auctions undoubtedly have their role. For rare, high-profile works or when competition itself can create value and sometimes eclipse concerns about fees. But for most collectors, particularly in today’s more measured market, private sales offer the advantage of calm negotiation, lower cost, and far greater control.
As an advisor, my aim is always to guide clients toward the route that best serves their interests ensuring that expertise, transparency and discretion protect both value and enjoyment in every transaction.